Hyundai & Kia Cough Up $395 Million To Address Misstated MPGs

In the fall of 2012, Hyundai and Kia were staring down the barrel of some massively bad press. Consumers had complained so long and so loudly about real-world gas mileage compared to the two brands' fuel economy claims, the EPA decided to investigate.

In the aftermath, Hyundai and Kia paid compensation to some 900,000 owners in the U.S. Those payments were based on annual estimates of how much Hyundai and Kia drivers ponied up for gas -- gas that they wouldn't have needed if their cars had earned their advertised fuel economy. The companies also paid an additional 15 percent on each of those payments, which were to be made annually for as long as the buyer owned the vehicle, for what the companies call the "inconvenience" to owners.

Conservative estimates calculated the cost to Hyundai and Kia at around $80 million per year.

1. If they're enrolled in the Hyundai/Kia reimbursement plan, they can continue to receive yearly payments. Those payments were estimated to be around $88 for every one mile that the stated fuel economy was off. So, for folks who own the Kia Soul -- which was re-rated 6 mpg below the advertised rate -- that would work out to around $528 per year.

2. If customers would like a lump-sum payout, they can receive one -- though they'll have to exit the annual reimbursement plan, and their payout sum will be adjusted to reflect any reimbursements they've already received. It's estimated that Hyundai owners will get an average of $353 in lump-sum payouts, while Kia owners will receive $667.

3. Customers can also chose to take their lump-sum payment as a dealership credit -- either a credit of 150 percent of the payout value (presumably for repair and maintenance work), or a credit of 200 percent of the payout value, which can be put toward the purchase of a new Hyundai or Kia vehicle.

Option 2 could save the companies sizable chunks of change over the long haul -- especially after the five-year mark. They make no official statement as to any preferred settlement--but the companies included these very similar quotes from one of the plaintiff's attorneys in their respective press releases:

"Kia's willingness to create a way for its customers to receive all of their future extra fuel expenses in a lump sum shows they are serious about making things right for their customers," said Rob Carey, a Hagens Berman partner working on the case. "Kia stepped up – and its customers will now get a full recovery without the chores of going to the dealership or filling out paperwork for years on end."

"Hyundai's willingness to create a way for its customers to receive all of their future extra fuel expenses in a lump sum shows they are serious about making things right for their customers," said Rob Carey, a Hagens Berman partner working on the case. "Hyundai stepped up – and its customers will now get a full recovery without the inconvenience of repeated dealership visits and paperwork."